Why Northcliffe would be a good deal for Trinity

Sunday Times city editor James Ashton is again suggesting that Northcliffe would be a good acquisition for Trinity Mirror.

He wrote in his column: "There isn’t much good news in Trinity Mirror’s share price right now. Since the newspaper group released its annual results on March 3, the stock has tumbled 42%.It puts the market value of Trinity, which owns 160 regional newspapers and five national titles, at £127m — little more than eight weeks of revenue. Sly Bailey, the chief executive, must be worried.In the market’s eyes, the company she has run for the past eight years is drifting into HMV territory."

He suggests: "Bailey desperately needs to find deals like her acquisition of the Guardian’s regional titles last year to squeeze out more savings. Northcliffe, the Daily Mail’s regional arm, is the pick of the bunch, but Trinity’s share price only makes a tie-up harder. If Northcliffe is broken up, Trinity could pick off some bite-sized chunks."

On Trinity Mirror, Ashton claims: "There are few pure British newspaper groups for a reason. Most publishers realised years ago it made sense to diversify. That is why most of the big titles are now part of companies that run used-car websites, trade fairs, pay-TV and publish school textbooks.Trinity has chosen to do newspapers and websites, pure and simple. With the economy so bleak, the market might be spooked by that strategy but the shares look incredibly cheap nonetheless."

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